In a client briefing Nishant Mani branded
the operator’s New York-quoted shares with an “outperform” rating and set a
price target of $24.00.

“We believe that Dorian offers investors
the ability to leverage the fundamentally attractive LPG shipping space, with a
significant ‘baked-in’ growth component in an orderbook of 19 vessels
delivering through and optionality to a higher rate environment,” he said.

The forecaster applauded what he
described as a “balanced chartering strategy” and “conservative balance sheet
position” that, in his opinion, will deliver “more attractive risk-adjusted
returns throughout the cycle”.

Mani acknowledged that the overall orderbook
in Dorian’s core market has “grown considerably” in recent months and could
weigh on the VLGC segment in the long-term but argued that the sector will
remain strong through 2015.

The analyst told investors the owner intends to fix approximately 33% of its newbuildings on time charters upon delivery in an
effort to provide revenue visibility and reduce market exposure, which suggests it
will still be in a position to capture upside if spot rates spike.

The researcher also pointed out that
freight rates have topped $90,000 per day and said he expects the rally to
continue in the near-term but believes daily levels will fall to $43,000 on
average in 2015 and 2016, an estimate he described as a “base case” for the
spot market.

Dorian LPG, which is led by chief
executive John Hadjipateras and trades under the symbol “LPG”, oversees 22
VLGCs and one small, pressurized gas carrier. The total includes 19
newbuildings that are due for delivery at various intervals over the next few
years.

Earlier in the day the company said hull
numbers 2656 and 2657, which are under construction at Hyundai Heavy Industries
in South Korea, are scheduled to hit the water in July and September of this
year, respectively.

Upon completion the
former, which will be named Comet, is due to commence a five-year charter with Shell.
According to the announcement the latter, which will be called
the Corsair, is still unfixed and will likely trade in the spot market.